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5 Tips to Maximize Commissions for Travel Agencies

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by Trond Sorensen in Travel Agencies ,

When a significant part of your business is centered on booking hotels, every commission payment counts. But the sheer number of hotels you book every year can make it almost impossible to accurately track and chase all the money owed to you.

Experience shows that agencies that try to do it all themselves may end up leaving as much as 40 percent of the hotel commissions they are owed on the table. Here are some tips for maximizing your earnings as well as making your collections process more efficient:

  1. Consolidate your payments as much as possible. Most large hotel chains offer payment consolidation services directly or through a third party such as Onyx CenterSource. Even though these services often involve a fee, in the end they usually save you money by reducing handling, data entry and accounting costs with easy file imports and reporting. The result? You get paid faster, in your preferred currency, and don’t waste time chasing payments that already have been made.
  2. Reduce bank charges and inefficient processes. When hotels do not use consolidation services for commission payments, the challenges are different. You can receive many small checks and wire transfers in a variety of currencies, which creates huge inefficiencies for you. With a third-party service, you can significantly reduce transfer fees and clearing costs for international checks, as they are spread across hundreds or even thousands of transactions.
  3. Have an active collections process in place. Many agencies still collect their own commissions, which can be costly and inefficient. The challenge is that they have to chase every hotel, every month. And when the majority of hotels they’ve booked for any given month represents just two to three room nights each, that can mean contacting hundreds, even thousands, of hotels every month. A third-party provider like Onyx can assist in your commission recovery efforts and increase commission collections 20 percent or greater.
  4. Know your performance. Make sure you have easy-to-access, intuitive reports that show how much you’ve booked, how much of that is commissionable, how much you have collected and how much is still outstanding. You can’t be expected to make good commission decisions if you are flying blind.
  5. Stop booking nonperforming hotels. There are no perfect hotel chains out there, but because you have many hotel partners, book the good ones and stop booking the ones that don’t reward your business. This means making your commission data available to your point of sale so your booking agents know which is a good commission payment partner and which is not.

– Trond Sorensen, Chief Sales Officer- Agency Services

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